Before this gets out of hand and porky shows up... I want to make it clear that I didn't express any opinion regarding the 'fairness' of the pensions.
I was only commenting that they are a relatively fixed cost and that downsizing doesn't change it - That stream is already committed. I was under the impression that it represented a sizable portion of the budget. I'll look at your link and research that a bit later...
-ERD50
And my point was they've lost money by their own admission for 4 years straight if they'd had ZERO retirement prefunding, you need only view the graphs (theirs) attached. Reading the pdf is optional.
Actually, I had to step away from the computer and didn't even have time to look at the graphs - I just wanted to get some pig repellent out there before it was too late.
So now I've looked the graphs. The first does not address the issue of how significant the retirement costs are - it just says they are losing money even before looking at that cost. So the cost could be big or small, right? I haven't figured out if this term 'pre-funding' in the second represents the whole of their retirement costs, or is some short term catch-up payments to the fund. But I did find this:
$15.9 billion loss highlights need for postal legislative reform
The $15.9 billion loss was driven by $13.4 billion in expenses that were outside the control of the Postal Service in the short-term. These expenses include the $11.1 billion retiree health benefits prefunding expenses and the expenses related to the long-term portion of workers’ compensation. When these expenses are deducted the net loss would have been $2.5 billion.
....
Operating expenses of $81.0 billion (including the $11.1 billion expense associated with prefunding retiree health benefits) compared to $70.6 billion the year before
OK, I guess that $11.1B is the same as shown in beige in graph 2, but that graph doesn't show total expenses. So $11.1B of $81.0B is 13.7% of expenses, and makes up ~ 70% of the loss. I'll say (and said) that is a 'big expense' that is independent of reduced delivery days.
Actually, I will say that the graph 2 is really slanted. They are showing all of that 'pre-funding' as part of the loss, when the loss is made up of ALL revenue minus ALL expense.
You brought up "their big expenses paying the pension/benefits for all the retired and soon to be retired employees" - and many have claimed their unfair, common refrain. After 4 years it's time to stop beating that drum, that was the central point...
Who is beating what drum?? I certainly did not interject 'unfair' into this discussion, I was merely pointing out it is a big expense unaffected by reduced delivery days (the subject of this thread). In fact, I go out of my way to avoid that sort of subjective language. I do point out that when discussing pensions, factors such as COLA and when you can take it are important for an apples-apples discussion (COLA being worth ~ 2x, and taking at 55 versus 65 another 2x) - those are factual, not judgmental.
Anyhow, my general point about these types of pensions (public and private) is that they are promises that are hard to keep. And that's not good for anyone. If instead of promising future $, they funded an employee's account, similar to a 401K, then if the business has to downsize and cut employees, that expense would be reduced in kind. And each employee would have what they earned to date, with no concerns about the future viability of the business affecting their retirement stash. And personally, I feel a lot more secure in my 401K/rollover/IRA, which has nearly doubled in value since the end of 2003, than in my pension, which is whittled away by inflation each year.
-ERD50
